OSU president expenses in the millions

E. Gordon Gee makes millions as president of Ohio State University, but a Dayton Daily News investigation found the university spends almost as much for Gee to travel the globe, throw parties, wine and dine donors, woo prospective faculty, hang out with students and staff and maintain a 9,600-square-foot mansion on 1.3 acres.

Since returning to Columbus as the university’s president in October 2007, the 68-year-old Gee has pulled in $8.6 million in salary and compensation, making him the highest paid CEO of a public university in the country.

But his expenses — hidden among hard-to-get records that the university took nearly a year to release — tally nearly as much: $7.7 million.

Gee’s spending is kept out of the public eye because it can be tallied only by examining multiple reports, including the quarterly discretionary expense reports delivered to the trustees and not easily obtainable by others. The Daily News first requested records documenting Gee’s work day, housing, American Express statements, travel expenses, discretionary spending reports and other data in September 2011. The university did not fully respond to the request until August 2012.

Those records show Gee stays in luxury hotels, dines at country clubs and swank restaurants, throws lavish parties, flies on private jets and hands out thousands of gifts — all at public expense.

The Daily News investigation found the university spent more than $895,000 for gatherings at the Pizzuti House, the president’s mansion, between April 2008 and June 2011. That works out to be about $23,000 a month — a little less than the average cost of a wedding.

The university spends tens of thousands of dollars alone branding Gee around his signature bow ties. Since 2007, Ohio State has spent more than $64,000 on bow ties, bow tie cookies and O-H and bow tie pins for Gee and others to distribute, the newspaper found.

“It’s a nice icebreaker. The freshmen show up on campus and President Gee hands them a cookie. They love it. The students love it,” OSU spokesman Jim Lynch said. He noted that people show off their Buckeye pride with O-H lapel pins all across the country.

Gee did not make himself available for an interview.

In a statement, OSU said rigorous standards are used in reviewing Gee’s expenses. “A significant proportion of President Gee’s time, travel and use of the university residence is devoted to resource-generation to support the work of our students and faculty,” the statement says.

Other supporters of Gee, including JobsOhio President Mark Kvamme, said his expenses are the cost of doing business for an institution that serves as a major job engine for the state of Ohio.

“In order to do everything that he does, he needs to be everywhere all the time,” Kvamme said. “The way I look at it, every second of Gordon’s time is very, very valuable for the state of Ohio.”

Gee’s travel, entertainment and housing expenses are paid from endowment funds that have been donated to the university for general purposes. OSU’s largest pool of unrestricted endowment money came from inventor Ralph Mershon, who graduated from the school in 1890 and bequeathed $11.2 million to his alma mater in 1952. Half of the Mershon gift was earmarked for civilian military education, the other half for discretionary spending by university trustees.

“No tuition or tax dollars are used to fund the president’s travel and use of the residence,” the university’s statement says.

Lavish lifestyle

Records released by the university show Gee is afforded the type of lifestyle rarely possible on a public salary.

He was paid a base salary, bonus, deferred compensation and supplemental retirement that totaled $1.9 million for the last fiscal year. At least twice during his tenure he has donated his bonus back to the university, which amounted to nearly $300,000 in 2010-11.

Ohio State provides him with a Visa procurement card and a Platinum American Express Card, up to 100 hours a year of flight time on private jets and authorization to fly first class or business class when on commercial flights.

The university picks up the tab for thousands of dollars for flowers Gee sends to politicians and staff members, annual airline club memberships for the president to work in quiet when he travels, and concert, basketball and football tickets that he can use as he sees fit.

His contract and university policy provide him with up to $20,000 a year in financial planning and tax preparation, a car for business and personal use, a fully staffed residence, and authority to charge to the university the cost of business breakfasts, lunches and dinners.

If he stays another five years, he’ll get a one-year paid sabbatical.

Gee, divorced from his second wife and widowed from his first, lives alone in the university-owned Pizzuti House in Bexley, a 9,600-square-foot mansion that the university remodeled for $1.3 million and then stocked with $673,000 in artwork, decorations and furnishings. European antiques, Persian rugs and a $532 shower curtain for the guest bath were among the amenities purchased for the house.

He is expected to — and does — entertain regularly. University records show Gee hosted 16,000 guests at 275 events at the Pizzuti House over the last five years, up from 5,757 guests at 138 events hosted there by former OSU president Karen Holbrook.

Gee’s parties — considered an essential aspect of the president’s outreach to the community and donors — are first class events, complete with specially designed and printed invitations, shuttle buses and parking valets, musicians and photographers, decorations and fresh flowers.

He throws receptions and dinners for well-known sports, entertainment, media, and political figures, including cyclist Lance Armstrong, actor Sidney Poitier, the president of Bangladesh and CNN correspondents Sanjay Gupta and David Gergen. And Gee regularly hosts receptions for his Bexley neighbors, new OSU faculty, African-American ministers, state lawmakers and others.

Off-campus, Gee entertains guests at tony restaurants in Columbus such as Lindey’s in German Village and Martini’s and Grisby’s in the Short North — expenses he can charge to OSU if it involves business. He also dines at one of the exclusive clubs where the university pays his membership and expenses, such as the New Albany Country Club, the Columbus Club and the University Club of New York. He hosts visitors in the president’s box at Ohio Stadium and the university’s luxury suites at the Schottenstein Center and Nationwide Arena.

When he travels, Gee is bound by university policy, which says: “The President is expected to stay in accommodations similar to those used by executives of businesses and not-for-profit institutions; however, luxury hotels should be avoided.”

The Daily News investigation found that Gee often stays at modest hotels such as Courtyard and Holiday Inn Express when traveling in-state. But his out-of-state travel receipts shows he often bills the university for more expensive accommodations: Le Meridien Bristol in Warsaw, The Taj Mahal Hotel in Mumbai, Loews Hotel Vogue in Montreal, Hotel George and the Four Seasons in Washington, D.C., and the Warwick in New York.

Gee, for example, billed his American Express card $905 for two nights at the Four Seasons in Washington after traveling there for meetings in April 2011. A similar trip in April 2009 cost the university $1,257 for three nights at the Fairmont Hotel in Washington’s Georgetown neighborhood.

The Daily News also found that on at least 16 occasions between 2008 and 2010 Gee hired limo services to shuttle him within cities such as Washington, Boston, Chicago and New York. The tab was $10,132 — or about $600 a trip.

Gee has built a strong natural reputation in higher education, but he’s also had bumps along the way. At Brown University, where he served as president from 1998 to 2000, he was criticized after the university spent $3 million renovating a home for Gee, including $400,000 that paid for a conservatory that was built in Great Britain and shipped to Providence. At Vanderbilt University, where he served as chancellor from 2000 to 2007, he was the subject of a Wall Street Journal article that documented $6 million in renovations of the president’s residence and a $700,000 annual tab for parties.

Gee’s tenure as president of Ohio State — his second at the school — has not been without blemish. The much-publicized football memorabilia scandal last year raised questions about Gee’s oversight of the program after he said in a press conference that he hoped Coach Jim Tressel wouldn’t fire him. Gee later fired Tressel.

Recent internal audits have dinged Gee for sloppy record keeping on his credit cards, such as not having properly documented business justifications or itemized receipts.

Last month, the Ohio Ethics Commission allowed Gee to file addenda to his 2007-2011 annual financial disclosure statements after it was discovered that he inadvertently failed to report more than $150,000 in travel expenses, including a second international trip paid for by King Abdulaziz University in Saudi Arabia, where Gee serves on an international board of advisers for the university.

The 2011 trip cost $19,501, according to Gee’s supplemental report.

Paying dividends

Gee is known for the ease with which he hobnobs with students — taking them to movies, meals and concerts and stopping by birthday parties and late-night student events. He even appeared with Brutus the Buckeye in a flash mob dance video at the Ohio Union that got more than 5 million views on YouTube.

He is just as comfortable in a university board room or Statehouse hearing room.

Gee is one of the nation’s most experienced university presidents, having led five of them since 1981. At Ohio State, he oversees a $5 billion a year operation with 65,000 students and 40,000 employees. (OSU’s annual revenues exceed Yahoo’s.) Since returning to OSU in 2007, Gee has helped raise $1.6 billion and is striving to raise $2.5 billion in gifts by June 2016.

Dan Hurley, spokesman for the American Association of State Colleges and Universities, said university presidents like Gee have to spend more time and energy fundraising to compensate for the decline in government support for higher education. “Given the size, stature and reputation of Ohio State University, the glad handing that comes with being the university chief executive officer is a requirement of the job,” Hurley said. “And it does pay quantitatively. Dollar for dollar, it pays huge dividends.”

Gov. John Kasich, who calls Gee’s “Ohio’s best politician,” just named him to head an effort to develop a new funding formula for the state’s colleges and universities. Last week Gee was also reappointed to the board of directors for JobsOhio, the Kasich administration’s economic development arm.

Kvamme said Gee helps attract top students and talent to Ohio State, puts a focus on commercializing university-developed technologies, and raises endowment money. He noted that when Gee travels abroad, he meets with big businesses interested in investing in Ohio.

“When he speaks, these companies listen because of the amazing capabilities that they have at Ohio State,” Kvamme said of Gee. “What I’ve really seen with Gordon is a person that really carries the Ohio message and — for lack of a better term — the greatness of Ohio not just in the United States but around the world. His ability to raise capital for the university, his ability to raise awareness for Ohio and Ohio State has been unmatched and I just really think what he has done is pretty exceptional.”

Lynch called the last two years of fundraising at Ohio State “the most successful in the university’s history. This past year, a record 211,000 alumni and friends committed nearly $365 million to the university. Private support has become increasingly important to our ability to provide accessible and exceptional education to our students,” he said.

But Richard Vedder, an Ohio University economics professor and director of the Center for College Affordability and Productivity, said general use endowments like the Mershon fund at Ohio State can and should be used to offset other public expenditures.

“They can take the money that is given to general university use and spend it on scholarships,” he said. “They can use that money, if they want, to keep the tuition increases from being as high as they have been. They have chosen to use this to throw parties and travel luxuriously and so forth.”

Undergraduate tuition and fees for in-state students rose from $2,856 in fall 2007 to $3,245 in fall 2011, a 13.6 percent increase.

Vedder said he has attended catered parties thrown by Gee both at Ohio State and Vanderbilt. “He thinks he’s in a special category by himself,” Vedder said of Gee. “In public service, that is kind of grating and I would think it would be grating on the public if they knew about it.”

Ahead of peers

Gee’s discretionary spending — a category that includes everything from foreign trips to tailgate parties before football games — far outstrips that of his predecessors William Kirwan and Holbrook. Under Gee, discretionary spending leapt 68.5 percent over what Holbrook had been averaging during her five-year tenure.

Gee also stands out when compared to his peers at other universities, though apples to apples spending comparisons are difficult because each institution lumps together different items in their presidential expense reports. Ohio State is bigger than most institutions too, further complicating comparisons. The size of the student body on the Columbus campus ranks behind only two other universities in America.

But the University of Texas at Austin and the University of Michigan do compare favorably to Ohio State in terms of academics, prestige and enrollment. In fact, both rank higher than OSU in the 2013 national university rankings of best colleges by U.S. News & World Report.

The presidents of UT-Austin and the University of Michigan appear to spend considerably less than Gee on entertainment and travel. Both, too, earn less in compensation.

Between 2007 and 2011, UT-Austin President Bill Powers spent $310,560 on travel, wining and dining and other entertainment on behalf of the university, records show. During a similar period, Gee’s travel bills alone totaled $1.1 million. Powers, who is midway through a $3 billion fundraising effort, makes $663,000 a year (compared to Gee’s $1.9 million), lives in his own house, has no car allowance and only flies first class if he has a doctor’s order. Powers does have access to state-owned planes.

UT-Austin’s Chief Financial Officer Kevin Hegarty said people are surprised at how “plain vanilla” Powers’ compensation and benefits package is. “It’s better to be that way,” he said. “The public expects it.”

At the University of Michigan, President Mary Sue Coleman’s travel and entertainment expenses from 2007 through 2010 totaled $410,235. Upkeep and utilities at the university-owned house runs an additional $100,000 a year and if Coleman takes someone to lunch or dinner, she pays the tab out of her own pocket, according to University of Michigan spokesman Rick Fitzgerald.

Coleman’s compensation package is $860,782 a year and includes housing and a car. Her employment contract does not call for first class airline tickets or private jets, as Gee’s does. In Michigan’s last endowment campaign she helped raise $3.2 billion — the most ever by a public university at that time.

There are signs that OSU isn’t keeping pace nationally on the size of its endowment. OSU slipped from 27th in the four years preceding Gee’s return to Columbus to 31st in 2010-11, according to the National Association of College and University Business Officers and the Commonfund Institute. The Big 10 universities Northwestern, Minnesota, and Michigan all ranked above Ohio State for the size of their endowment.

OSU’s endowment stood at $2.12 billion at the end of the 2010-11 year, up from $1.08 billion in the 2001-02 year. Last year the endowment’s market value increased 13.4 percent, compared with an average increase nationally of 17.9 percent, the NACUBO/Commonfund report said.

Vedder said the endowment rankings punch a hole in the argument that Gee’s spending is justified.

“If the results show they’ve moved from 30th to 10th in the endowments or gone up significantly, you might make an argument that some of this is sort of justifiable,” he said. “You have to spend money to make money. But if that’s the argument that they’re using, they’re doing a very inefficient job of it.”

Celebrated homecoming

When Gee returned to Ohio State for the 2007-08 academic year, the board of trustees celebrated the homecoming of a visionary leader who was “uniquely positioned to lead our great institution to even greater levels of achievement and national prominence,” according to the job offer he was given.

The university says Gee has done that and more.

Under Gee’s leadership, said Lynch, OSU has seen a 25 percent increase in new grants and contracts for research projects, opened offices in China and India and brought the average ACT score for incoming students to 28 — an all time high. And Gee and his team raised $1.6 billion, in part by privatizing campus parking operations and issuing a 100-year bond, he said.

“President Gee has strengthened relationships with key Ohio and national businesses and positioned Ohio State as one of the thought leaders in higher education today,” Lynch said.

But Dale Butland of Innovation Ohio, a liberal think tank based in Columbus, said Ohio State’s trustees need to rein in Gee’s spending, which he called “breathtaking.”

“No one disputes that Gordon Gee is doing a good job as president. That’s presumably why he’s earning $2 million a year in salary and bonuses,” Butland said. “The question is whether his spending $7.7 million on food, drink, hotels and parties is excessive. After all, presidents at other public universities whose academic ratings are even higher than OSU’s raise as much or more money than Mr. Gee does — yet somehow manage to spend only a fraction of what he spends. I don’t expect Mr. Gee to live like a monk. I just don’t think he should be living like Donald Trump.”

Kevin Holtsberry of the Buckeye Institute, a Columbus-based conservative think tank, said there should be a higher level of scrutiny on discretionary spending at Ohio State, particularly in an economy where many people are struggling.

“Gee has a fundamental view that OSU has to spend what it needs to spend,” Holtsberry said. “And I think that’s a great attitude if you’re in the private sector. The public, though, has to decide whether that’s working.”

Ohio State University President E. Gordon Gee’s discretionary spending from Oct. 1 2007 through June 30, 2012:

Travel: $1.09 million

Tailgating: $813,000

President’s special events: $2.17 million

President’s office: $1.6 million

Residence operation: $2.1 million

Grand Total: $7.77 million

Source: OSU records

An apples to apples comparison of university presidents’ expenses is difficult because each institution lumps different items into its reports. Here is a look at expenses and compensation for the leaders of three large public universities.

E. Gordon Gee, Ohio State University, $1.9 million a year compensation, plus a car, house and access to charter jets. Travel, housing, entertainment spending 2007-mid-2012: $7.7 million

Bill Powers, University of Texas at Austin, $663,000 a year in compensation, no car or house, access to state-owned aircraft. Travel and entertainment spending 2007 to 2011: $$310,360

Mary Sue Coleman, University of Michigan, $860,782 a year in compensation, plus a car and house, flies commercial. Travel and entertainment spending 2007 to 2011: $410,235. Housing upkeep costs another $100,000 a year.